For Owners, Renters, HOAs, Timeshare and Condo Boards – Alert: 4 New Laws Effective July 2012 for Florida Condos and Florida Timeshares
Posted By Larry Tolchinsky on June 19, 2012
A week from Sunday, on July 1, 2012, several new laws will go into effect here in Florida that govern how things work for those who live in Florida condominiums and Florida timeshares and the associations and boards that run things in these communities. Here’s a synopsis of the new Florida Statutes that were passed into law this year by the Florida Legislature regarding condo / timeshare life: Florida HB 13; Florida HB517; Florida HB 1001; and Florida HB 1013.
First, there is Florida HB1013 which we have been monitoring here in previous posts. It’s bad news for both the association / board as well as those who own or rent homes in Florida condominiums or other Florida communities because what has happened here is the Florida Legislature has decided that there is no implied warranty for “offsite improvements” (sewage, sidewalks, etc.) placed upon builders and developers in Florida. Great news if you are a builder.
Next, there is Florida HB 1001 – another piece of legislation we’ve been watching. This new law deals specifically with Florida timeshares and tries to stop the harm being done to timeshare owners, buyers, and sellers, by making it a legal requirement that there be full disclosure of all the terms and conditions when a timeshare resale service provider is involved in the deal.
Third, next month Florida HB517, which takes part of HB319, which we discussed earlier, and makes it law as of July 1, 2012. What this new statute will do is extend the time period for bulk buyers and bulk assignees of Florida condominiums under the Florida Condominium Act to July 2015 (it would otherwise have expired in 2012). This is great news for Florida investors – both local and foreign – but might not be so great for the individual condo owners.
Why? As a “bulk buyer” there is the legal benefit of being able to sidestep liabilities like warranties on individual condo units, which helps sell the condo project but doesn’t help the owner of that particular condo unit.
Finally, there is Florida HB13, which we have not discussed before on this blog. This law deals with docks in multifamily communities. It sets the maximum term for a dock or pier lease in a private residential or multifamily deal to 10 years; it allows this lease to be renewed in successive terms maxing out at 10 years if it’s otherwise okay under current Florida law; and if there is less than one wet slip for each residential unit then there’s not a lease fee on an area of up to 10 square feet of submerged lands for each linear foot of shoreline. Also, when there is a homestead exemption then a lessee doesn’t have to pay a lease fee on revenue coming from any transfer of ownership of that dock or pier.
Larry Tolchinsky’s Tip:
These four pieces of legislation do change things – hopefully for the better, in some ways – regarding living and renting condominiums and timeshares here in Florida. As we’ve posted about before, there are lots of condominiums and townhouses and timeshares in this part of the country – especially near our Hallandale Beach location – because of the beautiful, scenic oceanfront properties here. All those photos and postcards of Florida beaches? True. It really is just as beautiful here as those images suggest.
There is the reality that some of the new legislation is designed to help builders, developers, and investors in Florida real estate. That’s all part of the drive up in Tallahassee to get the Florida economy moving again, with things like extending the bulk buyer deadline for three years and wiping out builder/developer implied warranties of offsite improvements. Not everything that happened this year in the state capital was good news for those who live in Florida condos and multifamily communities.
Here are the detailed bill summaries for each of these new laws, as provided by the Florida Senate’s official website. There are still going to be lots and lots of conflicts and controversies between owners, renters, and associations and boards – these new laws don’t solve everything by a long shot.
If you have questions or comments, please feel free to Chat with Larry in the comments below, at email@example.com or (954) 458-8655.
Here are the Bill Summaries:
The bill requires the full and fair disclosure of terms, conditions, and services offered by timeshare resale service providers, which includes brokers and advertisers who offer unsolicited telemarketing, direct mail, or e-mail in connection with the offering of resale brokerage services or resale advertising services to consumer owners of timeshares who wish to sell their interest in a timeshare. It provides exceptions for sales by consumers and licensed real estate brokers.
The bill specifies the information that resale service providers must provide to the consumer timeshare resellers before engaging in resale brokerage services or resale advertising services, including a description of any fees or costs; a description of when such fees or costs are due; and the ratio or percentage of the number of timeshare resale interests sold or rented versus the number of timeshare resale interests listed for sale or rent by the timeshare resale broker for each of the previous two calendar years. Resale service providers may not engage in those activities of a real estate broker unless they are a licensed real estate broker.
The bill prohibits timeshare resale service providers from:
Representing that they will provide any type of direct sales or resale brokerage services;
Representing that another person has a preexisting interest in the timeshare without providing identifying information for that person;
Representing that sales or rentals have been achieved or generated, unless the resale provider substantiates the statement at the time of representation;
Representing that a specific number of sales or rentals have been sold or rented without providing the consumer with the ratio or percentage timeshare interests advertised that have actually resulted in a sale or rental for each of the previous two calendar years;
Representing that a timeshare interest has a specific resale value;
Collecting any payment that exceeds an aggregate total of $75 or more in any 12-month period without first receiving a written contract; and
Failing to honor a cancellation notice sent by the consumer timeshare reseller.
The bill specifies the information that must be included in a written contract for resale advertising services, which includes a conspicuous statement that the consumer has the right to cancel the contract for advertising services within 10 days after the date the contract is signed. The bill also requires that resale advertisers provide a full refund within 20 days of the consumer’s cancellation of the agreement, or five days after the consumer’s check has cleared, whichever is later.
If the contract for resale advertising services fails to comply with the provisions in the bill, the contract would be voidable at the option of the consumer for one year after the date it is executed by the consumer. If a violation of the provisions in the bill occurs during an offering of resale services, both the resale service provider and the person who actually commits the violation would be deemed to have violated this section.
The bill provides that persons who provide resale advertising services for timeshare interest have submitted to the jurisdiction of the state courts. The bill provides a civil penalty of $15,000 per violation in addition to the penalties and remedies provided in the Unfair and Deceptive Trade Practices Act in part II of ch. 501, F.S.
The bill provides that a purchaser of a new home or a homeowners’ association does not have a cause of action for damages based on an implied warranty of fitness and merchantability or habitability, relating to an offsite improvement for a new home. Under the bill, an “offsite improvement” includes a street, driveway, road, sidewalk, drainage, utilities, or any other improvement or structure that does not immediately and directly support the fitness and merchantability or habitability of the home itself.
The bill revises references to the professional standards with which registered, licensed, and certified appraisers are required to comply. It requires the Florida Real Estate Appraisal Board to adopt rules that establish standards of professional practice that meet or exceed nationally recognized standards of appraisal practice, including standards adopted by the Appraisal Standards Board of the Appraisal Foundation. It requires these standards to be used in the purchase of lands for the Lake Apopka Improvement program.
The bill waives the initial licensing fee, the initial application fee, and the initial unlicensed activity fee for military veterans who apply to the department for a license within 24 months of being honorably discharged from service.
The bill reduces the continuing education hours required to reactivate an inactive license to only one renewal cycle of hours, instead of the hours required for each year the license was inactive, for the following professions: community association managers, home inspectors, providers of mold-related services, cosmetologists, architects, landscape architects, construction contractors, and electrical and alarm system contractors. The bill exempts certified public accountants licensed under ch. 473, F.S., and real estate brokers, sales associates, real estate schools, and appraisers licensed under ch. 475, F.S. These professionals would continue to be required to complete the continuing education required for each two-year period of licensure in order to reactivate an inactive license. The bill also provides that the Board of Architecture and Interior Design may only approve continuing education for an interior designer that builds upon the basic knowledge of interior design.
The bill repeals provisions that provide criminal penalties for violations of agency rules and the chapters of the Florida Statutes that govern the specified professions. Under the bill the following professions would not be subject to criminal penalties for such violations: auctioneers, real estate professionals, barbers, and cosmetologists. However, the bill limits the application of criminal penalties for specified violations by auctioneers that relate to financial dishonesty or malfeasance.
The bill revises the provisions related to the regulation of appraisal management company’s banks, credit unions, or other lending institutions that own and operate an internal appraisal office, business unit, or department. This is consistent with the federal Dodd Frank Act, which exempts from state regulation, financial institutions that own or operate an internal appraiser office, business, unit, or department and appraisal management companies that are owned and controlled by a subsidiary of a financial institution.
The bill extends the time period to be classified as a bulk buyer or bulk assignee from July 1, 2012, to July 1, 2015, in the context of the Distressed Condominium Relief Act in ch. 718, part VII, F.S. This provision delineates the warranty and other obligations of “bulk buyers,” i.e., persons who purchase more than seven units in a single condominium but were not assigned developer rights or other specified rights.
In addition, the bill:
Permits applicants for a real estate appraiser’s certification to use the results of national examinations required for the license that were obtained more than 24 months after the date of the examination;
Permits real estate continuing education instructors to complete their continuing education through distance learning and permits real estate schools to offer any course through distance learning;
Revises licensure requirements for architects by removing the ability of the Board of Architecture and Interior Design to review and approve unaccredited schools and colleges of architecture and courses of architectural study and allows the required internship to be completed as provided by board rule;
Permits architects who have passed a license examination in another state and are licensed in that state to qualify for a Florida-issued architects license if they hold a minimum- 4-year degree, have held the license for a minimum of 10 years, has been a continuous resident of this state for 10 years, and have completed the continuing education requirements for renewal of a license for the biennium license renewal period ending on February 23, 2013. This provision would expire on March 1, 2013;
Conforms with exemptions for other utilities by removing a requirement for persons repairing, maintaining, removing, or disposing of asbestos-containing pipe or conduit used for gas service to be licensed as an asbestos consultant or contractor;
Expands exemptions regarding mold-related services to include landscape architects if they are not holding themselves out for hire to the public using names implying that they perform mold assessment services or stating or implying that they are licensed under ch. 468, part XVI, F.S.; and
Provides an exception to the prohibition against the selling and processing of distilled spirits that are greater than 153 proof. To qualify for the exception, the distilled spirits must be bottled, packaged, or processed for export or sale outside the state.
The bill also revises the Florida Drug and Cosmetic Act in ch. 499, part I, F.S., which is administered by the Drugs, Devices and Cosmetics Program within the Department of Business and Professional Regulation. The bill organizes various exceptions to the permit requirements into a single subsection. It eases existing restrictions on the limited distribution of active pharmaceutical ingredients to Florida-permitted prescription drug manufacturers and restrictions on prescription drug distributions to Florida-permitted prescription drug manufacturers and researchers. The bill reduces inventory recordkeeping requirements for contract providers who transfer prescription drugs to or from government agencies or eligible facilities at public health prices. The bill provides an exemption from the prescription drug re-packager permit requirement and the product registration requirements for a restricted prescription drug distributor permitholder that is a health care entity that re-packages prescription drugs in this state for its own use or distributes prescription drugs to a hospital or other health care entity in the state for its own use if it meets certain conditions.
The bill authorizes the Board of Trustees of the Internal Improvement Trust Fund (Board) to lease sovereignty submerged lands for certain multi-family residential docks and piers without requiring lease fees. It specifies a maximum 10-year lease term, lease fees for the preempted area over and above the 10 square foot per linear foot of shoreline maximum, exemptions from lease fees on revenue derived from transfer of private property entitled to a homestead exemption and inspections at least once every 10 years to ensure compliance. The bill authorizes the Board to impose additional fees and requirements authorized by law. Finally, the bill provides for a transfer of $1 million from the General Revenue Fund to the Internal Improvement Trust Fund to defray the fiscal impact of the bill.